Branding:
Coca Cola and Irn Bru (Barr) are both brands that present their product under
one company name. Coca Cola’s products are presented under the Coca Cola
Company while their competition, Irn Bru is presented under the company BARR.
The Coca Cola Company was established by Asa Griggs Candler in 1889. Throughout
the years it has become an American multinational beverage corporation and
manufacturer, retailer, and marketer of non-alcoholic beverages. When Coca Cola was first created it was
served at Jacob’s Pharmacy as a syrup to mix with carbonated water. It then
became patented in 1887, registered trademark in 1893 and by 1895 it was sold
all over the United States. It wasn’t until 1906 that The Coca Cola Company
expanded internationally. (Product Descriptions, n.d.) The Coca Cola Company
offers a diverse range of soft drinks to be able to give customers a wide range
of items to choose from. It is because of this that their company has the
largest portfolio in the beverage business. Due to this, Coca Cola has a large
market presence in around 200 countries a the moment. This is due to the large
variety of brands under the Coca Cola Company. These include: Coca Cola Classic,
Diet Coke, Fanta, Sprite, Smart Water and many others which can be found on
their website - http://www.coca-cola.co.uk/drinks
(Brands, n.d.). By offering a large variety of brands under The Coca Cola
Company they are more likely to attract more customers and do better than their
competitions which can be seen as the annual profit for 2015 for The Coca Cola
Company finalised at $44,294 million (Coca-Cola's revenue and income from 2009
to 2015 (in million U.S. dollars), 2015) whereas in 2015, Barr’s final revenue
was at £130.3 million (Barr, 2016) which shows that The Coca Cola Company had a
significantly higher revenue than Barr.
The famous Scottish drink, Irn Bru, is presented under A. G. Barr Plc
(more commonly known as Barr). It was founded by Robert Barr in 1875 in
Falkirk. They later expanded to Glasgow and are now selling drinks all over the
UK and some other EU territories. (About A.G. BARR, n.d.)
Barr sells many products, most famously known for its popular Scottish
drink – Irn Bru and a sugar free version of Irn Bru. However, they also sell
many other drinks including Barr Flavours which is their own brand version of
flavours such as cola, bubblegum, lemonade, cherry and many others. While
selling their own brand versions of flavours, Barr also sell other drinks such
as Rockstar, Strathmore, Rubicon and many others which can be found on their
websites - http://www.agbarr.co.uk/our-brands/.
By offering a large variety of brands under Barr, they can meet customers’
demands much more easily and increase their market share which can further
limit competitors such as The Coca Cola Company.
Branding provides benefits for both the customer as well as the company
selling the products, as it helps customers identify which products they prefer
and which products they do not like. Another benefit of branding for the
customer is that it reduces the time spent looking around for the best brand to
purchase as without a selection of brands to pick from, customers would feel
confused and have no assurance as to which brand they liked as it would all be
in a random variety. An example is that both Coca Cola and Barr have different
drinks that customers can purchase and different versions of the drink such as
a sugar free or diet version which can help those who are cutting down sugar in
their diet. If brands were all over the place and both Barr and Coca Cola did
not have a wide variety of drinks to choose from, many customers would not know
which drink is best for them. Also by having a variety of brands under the one
company, this reinforces brand loyalty which helps both the customer as well as
the company as the customer will usually stay loyal to the brand and the
company will benefit from this through profits. (Dibb., et al, 2016).
Overall, both The Coca Cola Company and Barr have similar strategies
when it comes to branding products as they gain the ownership of many different
brands to increase their market share and increase customer attraction which
further increases the profit that both companies receive. This profit increase
comes from brand loyalty as well as having a wide range of items to choose from
and different versions of each drink which can appeal to everyone.
Product Life Cycle:
Product Life Cycle:
Just like everything else has a life
cycle, so too do products. All products go through the stages of birth to death
and everything in between. When a product is born, it goes through the growing
stages and once it loses attraction from customers and the sales go down the
product is then killed off to save money. All products go through the 4 stages
of the product life cycle. (Dibb, S., et al, 2016).
The first stage is the introduction stage. This is when the product
makes it’s first appearance on the market. This is when sales are at 0 and
there is no profit.
The second stage is the growth stage. This is when sales and profits
are going up rapidly until they reach a maximum point where they then start to
deteriorate.
The third stage is the maturity stage where the sales reach a maximum
but then start to go down while the profits are continuously falling.
The final stage is called the decline stage. This is when the sales are
declining rapidly and this is usually due to new technology or a competitor
reducing the marketshare. (Dibbs. Et al, 2016).
An example of this product life cycle is when The Coca Cola Company
decided to pull off all the original formulas of their drink Coca Cola from
shelves after their rival Pepsi was found to have a sweeter tasting version of
cola in 1985. The reason for this was because after the initial growth stage,
The Coca Cola Company found out that Pepsi Cola was about to catch up to its
success and may even overtake Coca Cola as many people preferred the Pepsi
version of the popular drink. So, Coca Cola decided to create a new formula and
a whole new drink called ‘New Coke’. This failed as soon as it hit the shelves
as many people were protesting for the original version of the drink to be put
back as they did not like the ‘New’ Coke. This decision by Coca Cola has been
called ‘the biggest marketing blunder of all time’. (Bhasin, 2016). After Coca
Cola’s sales and profits dropped significantly due to the introduction of the
‘New’ Coke, they decided to scrap their idea and reintroduce the ‘classic’
version of the Coca Cola. This is a good example of the produce life cycle as
when it was introduced it immediately did not do well so it went from the
introduction stage to the decline stage very quickly as majority of the
American population were opting for their competition’s drink – the Pepsi Cola.
This also shows how this can be used as a strategy as when a product is pulled
from the shelves completely, many will want it back and so when it comes back
to market it does a lot better like the classic version of Coca Cola did after
it was brought back after the New Coke. (Bhasin., 2016).
New Product Development
A new product usually meets one of the following criterias:
·
New to the world
· New to the company – an example is when Apple
released the first ever iPhone which was new for the company as they only made
computers and laptops.
· New product line
· New variation on existing products – new flavour
of foods that are already out there or example, different crisps flavours. An
example from Coca Cola and Barr is when they changed their drinks to introduce
healthier options such as Coke Zero, Diet Coke and sugar free Irn Bru.
· New position in the market – appealing to the
young when a product used to appeal to the older generation, an example would
be when Lucozade started to target their advertisements towards the younger
generation instead of the older generation like they used to. (Dibbs. Et al,
2016).
The Coca Cola Company decided to go for a healthier option when they
introduced different variations of their popular drink – coke – to appeal to a
wider segment of people such as those who want to cut down their sugar intake.
In 1983, diet coke was launched in Europe and 3 years later it quickly made
it’s way to the top of the low calorie drinks list. (Journey Staff, 2016).
Other examples of this strategic move includes The Coca Cola Company
introducing different variations of the already existing drink such as Coca
Cola Vanilla, Coca Cola Lemon, Coke Zero and the recent addition of Coca Cola
Life. (Brands, n.d.)
An example from Barr is when they introduced a sugar free version of
Irn Bru to appeal to a larger health conscious audience. Barr then decided that
they would also create a different version of Irn Bru such as Irn Bru XTRA. The
idea behind this new drink is that it is “full of extra taste” but has “no
sugar”. (Connelly, 2016).
Overall, both Coca Cola and Barr introducing new and healthier versions
of their most popular drinks are very beneficial to their companies as they can
provide their customers with more choice and appeal to everyone, no matter what
their taste is. However, new product development is very risky and expensive.
The initial production phase can take a very long time and can cost the company
a large amount of money, especially if the product fails or does not succeed as
well as it should have. Although developing new products and brands are risky,
failing to produce new products is also risky as the business can be seen as
old and not integrating with society’s new standards. (Dibbs., et al, 2016).
The famous Scottish drink
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